How does auto insurance pay for property damage in the event of a car accident?
UPDATED: February 5, 2020
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There are generally two types of auto insurance coverage: first party coverage and third party coverage. First party coverage insures you and your property (such as medical expenses, damage to your vehicle, the insurance company's duty to defend you if you are sued as the result of your operation of a vehicle, etc.). Third party coverage pays for other peoples' injuries or property damage when you are responsible for all or part of an accident. The coverage (and exclusions - things not covered) are set forth in a contract with the insurance company. In exchange for the payment of a premium, the insurance company promises to provide compensation in the event of certain occurrences. There are many coverage options available from insurance companies, and sometimes options that are available from one company are not available from another company. The cost for the same amount of insurance coverage may vary from company to company.
Before purchasing auto insurance, it is a good idea to shop around. Buy the coverage that best suits your needs from the insurance company that offers this coverage at a reasonable price. Positive factors such as customer service, ability to pay claims, a record of paying most claims, general reputation and analyses done by independent organizations should be considered before you make a purchase.
Your vehicle itself can be covered in a couple of ways under an automobile insurance policy. Comprehensive coverage provides coverage for loss to your vehicle due to certain direct causes (such as fire, theft, vandalism, and acts of nature). Collision covers damage to your vehicle in the event that it collides with another vehicle or object, often regardless of who is at fault in the accident. Both comprehensive and collision coverage may be subject to a deductible, that is, damage to the vehicle must exceed the deductible amount before the insurance company must pay you for a covered loss. Deductibles for coverage are available in various amounts, generally the greater the deductible, the lower the premium for the coverage.
If you have suffered injury or property damage due to a car accident, seek the advice of an experienced car accident attorney. It is important to do so right away in order to preserve your rights, because each state limits how long you have to sue through its statute of limitations. An experienced attorney can review your case at no cost to you by filling out Free Advice's case evaluation form. After completing it, an attorney will contact you to discuss your case, with no further obligation.